Newspaper Insurer Press Issue No 4

Dear readers, in the overview of the newspaper Insurer Press we put an accent on the highlights and hot topics news and events. We make you acquainted with the analyses and thoughts expressed by the leading insurers and also keep you informed about all that happened within the period between the last two issues of the newspaper.

We offer our best wishes to our contributors, friends and well-wishers, who celebrate their birthday or name-day.

Many happy returns!

On page 2 is the following information:

·        NRA begins inspections of insurance agents. 3 514 insurance agents will be investigated by officials of the NRA to explain why they have not declared income amounting to a total of 14.6 million lev Among these insurers the largest discrepancies found are between the data of

 fees paid and declared revenue by agents themselves to the NRA. All of them received commissions, or income from  civil contracts with insurers on the Bulgarian market. At the end of last year the NRA checked documents of 39 insurance companies in which they found evidence of the amounts paid to a total of 65 967 agents. After the analysis  NRA made at the end of 2009, it became clear that many insurance agents have not declared their income to the NRA. Currently at our insurance market there are 37 operating companies for insurance and life insurance. For them,as insurance agents, for example, are working 66 000 people.

·        Police ruined an attempt for an insurance fraud.

·        Sofia was a host to the newest in the field of safety.

from 16 to February 19 this year in the National Palace of Culture the 17th International Specialized Exhibition and Seminar for Security and Safety, SECURITY 2010  was conducted.

On the same page is the usual article „Between 2 editions” and last news from FSC concerning:

·        Emil Atanasov, Deputy Chairman of the FSC, Governor Insurance Supervision Department, took the decision to approve Metodi Vangelov Yankov for member of the Board of Directors and Executive Director and the person empowered to carry out powers under Art. 235 от ТЗ на Здравноосигурителен институт" АД, гр. София. 235 of the Commercial Code of the Health Insurance Institute AD, Sofia.

·        Mr. Atanasov issued two decisions which approve Paul Claude Daniel Ensenzher for member of the Board of Directors of Grupama Insurance EAD, Sofia and „Life Insurance Grupama EAD , Sofia.

·         Mr. Atanasov issued a decision, which entered "holiness Group Ltd., Troyan AND PES AND EU Ltd., Varna, in the register of insurance brokers. He also issued a decision revoking the previous one- № 912-ZB issued on 04.11.2009,which refuse the entry of "Divas Art Ltd., Varna, in the register Insurance Brokers of art. 30, ал. 30 para. 1, т. 9 от ЗКФН. 1, item 9 of the Financial Supervision Commission Act. Решение № 34 е публикувано в раздел „Административни документи”.

·         Mr. Atanasov issued a decision approving the proposed changes in general conditions, tariffs and technical plans for health insurance packages proposed by „DZI - HEALTH INSURANCE” AD, Sofia and approved by the commission.

·        At its meeting of February 17, 2010 FSC took the  pension license for conducting activities under the additional pension insurance by „Lukoil Garant - Bulgaria" AD, Sofia, due to its acquisition by POAD CCB - Force AD, Sofia, in terms of universal succession.

In our usual article “News from the Companies” we take account of the successful start of the new Back Office in Generali Life Insurance AD.

On page 4 and 6 „Topic of the issue” this week is agricultural insurance. The article is named „bills against the stress in the field” and in it the author I.  Stefanova makes the following main conclusions:

•        The crisis additionally narrowed the agricultural business of the insurers

•        Only the newly formed land funds in our country do not “save” from insurance, but insist for very low tariff figures.

Still on the same page is the opinion of Pavel Petkov, manager of „Agricultural Insurance” in ZAD „VICTORIA”, who said:

Despite the crisis in 2009 ZAD „VICTORIA” continued to develop agricultural insurance and manifested increase both of the number of clients and of premium income .Amongst our new clients there are leaseholders, farm co-operatives and joint stock companies.

A notably positive phenomenon in agricultural insurance in 2009 was the start of the National Programme for support of vine-growing and wine-production sector according to the measure for state financial support of insurance of vineyard harvest. Practically Bulgaria has started following a completely new way, which for a long time has been followed by a lot of other countries – stimulation of agricultural insurance by means of undertaking  a significant part of the cost of the insurance by the state.

The discussion of the topic continues with the comment by Stanimir Niagolov, chief expert of „Agricultural insurance” at „Generali Insurance”AD(p.6). According to Mr. Niagolov this year will most probably be more risky for the agricultural produce compared to the previous 3 – 4 years. Basically under crisis conditions both the number of clients and insured plots of land decrease. Such statistics not being made so far, it can not be specified what part of the crops in our country for 2010 yield are insured and against what risks. Farm producers constant intention has been noticed to take out insurance bills for bigger amounts, especially when they have made bigger investments in the cultivated crops.

On page 7,10,16 is the detailed interview of Ileana Stoianova with prof Phd of iconomics Neno Pavlov,vice chairman of Financial Supervision Commission and in charge of running „Insurance control”, concerning additional pension security issues. How the market  is developing and has the crisis been overcomed?

Mr. Pavlov pointed up:  „The global financial crisis in all countries has given its negative impact on the development of supplementary pension provision. В резултат на въздействието й през 2008 г. за първи път от въвеждането на допъл-нителните капиталови схеми в страната беше постигната отрицателна доходност от управлението на активите на пенсионните фондове в рамките на 20% – 23%. As a result of its impact in 2008 for the first time since the introduction of the additional capital schemes in the country had achieved a negative return on asset management of pension funds within 20% - 23%. Предва-рителните резултати за отминалата 2009 г. обаче сочат, че пенсионният пазар започва с умерен темп да се възстановява. The preliminary results of the past in 2009, however, suggest that the pension market began with moderate pace to recover. След излизане на окончателните резултати ще бъдат направени по-пълни и обосновани анализи, но отсега могат да се очертаят откроява-щите се позитивни тенденции в стабилизирането на сектора през изтеклата година. After leaving the final results will be made more comprehensive and reasoned analysis, but now may be drawn-shtite be highlighted positive trends in the stabilization of the sector over the past year. The number of insured persons in the four types of funds to 31.12.2009 reached 3, 764 thousand, grew by 3.32 per cent against the insured at the end of 2008 with the exception of voluntary funds, which are seen in a slight decrease than 1,00 per cent in the number of insured, the remaining funds increase their participants.The largest absolute number of insured persons registered with the universal pension funds - 2, 934 thousand, which is 77.95 per cent of the total number of all the four types of funds.”

On page 8 and 14 under the heading of „Subject further developed” is the article „Civil LIABILITY-AGAIN  FOCUSED”. 19% of all vehicles in the country are driven without the compulsory insurance, although the average price during 2009 was about 164 BGN.

In the conference about the problems concerning vehicle insurance in Bulgaria under the motto „responsible to myself, responsible to others”, which was held on November, 10 2009, Sofia participated lecturers from Bulgaria - Emil Atanasov, Deputy Chairman of Financial Supervision Commission, Chairman of Insurance Supervision department, Stoicho Konstantinov, Chief of Administrative criminal activity in Traffic Police at the National Police Service, Tsvetanka Krumova chief executive of ZAD „ARMEEC”, Donka Tileva , head of the Information Center to the Guarantee Fund, Atanas Tabov-Chairman of Bulgarian National Bureau of automobile insurance, Tanya Chonkova - Secretary General of the National Bureau of Bulgarian of automobile insurance.

Their experience shared the visiting foreign lecturers coming from Sweden, Romania, Czech Republic.

In his presentation Atanas Tabov, introduced to the people the system “Green Card” from its origin to its development.  

On page 9  in the article „highlights” Yuri Todorov, chairman of the Association for insurance security explains the basic reasons for the lack of system „bonus-malus” and the individual risk coefficient.

1.       Hard competition for every client on the market, without considering his/her risk characteristics.

2.       The lack of clear criteria for the importance of every different risks of that insurance.

3.       Relatively low compensations in the field of moral damages.

On page 11 and 16 under the heading: “will the second insurance pillar cope with the unstable health system?”  we continue with the publication of materials from the Conference “heath insurance in Bulgaria- condition and perspectives” held on January, 26 in Sofia.

Emil Atanasov, vice chairman of The Financial Supervision Commission, Head manager of „Insurance Supervision” presented his report named „Activity on voluntary health insurance and the supervision over it”. It concerns the  main rights of The FSC in respect of  its control over the activity related to voluntary health insurance, as well as the regulating frame, the requirements to the  health-insuring companies, the sanctions to them at certain conditions and the situation of the market of voluntary health insurance during the last years.

On page 12 and 13 there is he dialog between Michael Rihter, general manager of Austrian „EUROLIFE Insurance Broker Management” and Bojidar Vasilev, manager of  „Eurolife Bulgaria”, from which it becomes clear that the successful activity of the company continues and for 2009 „Eurolife” has 23800 new contracts with totality of premiums amounting to 13,5 mln dollars. The main task for the year 2010 is the training of the consultants.

On page 15 and 19 in “Analysis”:  about pension insurance the preliminary results of the activity on additional pension insurance for 2009 are stated. Till 31.12.2009 the number of the insured people in the four kinds of funds reaches 3 764 958 pax, which represents a growth with 121 209 pax, or with 3,33 % compared to the insured people towards the end of 2008. The conclusion is that the pension-insurance sector realizes positive total net financial result.

On page 22 is the first interview with Ivo Atanasov, executive manager of „General Brokers”AD. According to the opinion of Mr. Atanasov, the crisis is a trap and a trial, which will be overcome only by the best people.

We can conclude with the optimistic words of Zlatolina Mukova, Chief Executive Director „Euroins Insurance Group” PLC, mentioned in her interview to „Insurer Press”(p. 24)

„In my opinion, our market in a great extent is following and reflecting the world tendencies in insurance- there is a decrease in GDP of the market as a whole ,but it is slower compared to other sectors of economics. Concerning the regulations in the field of insurance, we can definitely say that it has been fully Europeanized.”

 Selection: Vania Petrova

Translation: Magdalena Dimitrova